McDonald’s SWOTT Analysis Essay Example

compared to other fast-food companies in the industry (Love, 2005).

McDonald's has a global presence, operating in over 100 countries and employing more than 32,000 workers directly and indirectly. This extensive reach has established a strong brand name and loyal customer base that consistently makes repeat purchases across various restaurant locations. One of McDonald's strengths lies in its involvement in the real estate industry. By owning the buildings where their restaurants are situated, McDonald's can expand their operations and attract customers to rent out space, generating additional revenue. This strategic approach helps finance underperforming restaurants.

In addition to this, McDonald's excels at introducing innovative products that are unique within the fast-food industry. The company prioritizes providing high-quality items while also being health-conscious, which is especially important given current criticism towards promoting an unhealthy lifestyle among young people. To address concerns about obesity, it is crucial for fast-food companies to introduce new menu items.

McDonald's success can be attributed to its implementation of quick-service restaurants aimed at efficiently serving customers. This approach appeals particularly to time-limited young working-class families and grants McDonald's a competitive edge.

Furthermore, with its large market size, McDonald's benefits from economies of scale.McDonald's ability to offer affordable products by minimizing production costs helps attract price-sensitive customers and gain a competitive advantage. The implementation of Jim Cantalupo's "Plan to Win" approach, which prioritizes people, products, price, place, and promotion, has contributed to the company's success in effective management and leadership. McDonald's has improved the work environment by increasing its workforce and enhancing employee compensation. They have also expanded their menu to cater to customer preferences and offer healthier options.

To achieve its objectives effectively, McDonald's can capitalize on

available opportunities such as diversifying their operations with non-fast food meals in their restaurants or acquiring other companies within the fast-food industry to strengthen market share. Introducing a low-cost menu is another opportunity that would establish a strong brand image and promote customer loyalty among their target audience of young individuals and those with lower income levels.

However, McDonald's also faces several weaknesses.McDonald's is known for its poor customer service and ranks sixth among fast-food chains in terms of customer satisfaction. However, it falls behind others in the industry, ranking ninetieth overall due to inaccurate services. Inconsistent product quality is another weakness faced by McDonald's, leading to a decrease in customer confidence. Customers often complain about lower quality hamburgers compared to other options in the market.

Furthermore, McDonald's faces strong competition from rivals in the fast-food industry who offer higher quality products through innovation and engage in price wars. This has resulted in competitors gaining market share. Additionally, health concerns surrounding McDonald's products pose a threat as consumers increasingly demand healthier options amidst weak economies.

An analysis of the company's financial performance over time reveals certain trends according to Porter (2006). The current ratio has improved from 0.524368 in 1998 to 0.727829 in 2003, indicating an enhancement in the company's ability to pay short-term liabilities. However, the return on equity has declined from 0.162282 in 1998 to 0.123051 in 2003, suggesting a reduction in investors' return on their investment.In conclusion, while investing in McDonald's may not be the ideal choice, the company still holds a dominant position in the fast-food industry. By leveraging its strengths from a SWOTT analysis, McDonald's has become an industry leader. Additionally, it has

successfully overcome weaknesses by implementing Jim Cantalupo's "Plan to Win" strategy to achieve success and remain competitive in the market sector.